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Beijing‘s efforts to prop up a slowing Chinese economy, in the middle of an ongoing trade war with Washington, is pushing the government to introduce previously untested policies, according to a senior analyst at Moody’s Investors Service.

While official data have indicated that China’s economy held up for much of last year, cracks have started appearing in recent months as production metrics and export orders fell.

After decades of breakneck growth, the world’s second-largest economy was already facing domestic headwinds even before the escalation in trade tensions with the U.S. But the tariff war has piled on additional pressure on China’s economy.

“We see growth in China slowing to 6 percent,” Christian Fang, an assistant vice president-analyst at Moody’s, told CNBC’s “Squawk Box” on Thursday. “I think the bigger issue for us is that policy trade-offs have increased in China. On the one hand, there is this broader campaign of de-risking, deleveraging, but policy also seems to be shifting slightly towards growth — supporting growth.”

“Some of the tools in the policy response they have meted out are untested,” he added. “Tax cuts, for instance, we don’t know what the businesses and the consumers — how they would respond to the tax cuts.”

In last few months, Beijing has announced several measures aimed at propping up its economy.

On Wednesday, state media reported that China will be granting more tax breaks to small firms. The measures include substantial cuts in business income tax rates and an increase in the tax threshold, with the aim of saving small and micro firms a total of 200 billion yuan ($30 billion) each year, according to Xinhua.

The People’s Bank of China said last Friday it will cut the amount of reserves that banks are required to hold by 1 percentage point this month — that means banks would have more money to lend to customers. In December, the Chinese central bank introduced a new tool to encourage commercial banks to give out more loans to smaller firms.

The measures to spur growth, which theoretically could saddle the economy with more debt, is creating a trade-off with Beijing’s efforts to clean up its financial system. Experts have said that the ongoing trade war with the U.S. is forcing China to retreat from its own anti-debt battle while others have suggested the country hasn’t done enough to stimulate the economy.

“Since mid-2018, China’s authorities have eased policy through targeted liquidity measures, taxation changes and infrastructure spending, which will shore up growth,” Fang and his colleagues at Moody’s wrote in a Jan 10. report.

“However, designing and implementing policy that simultaneously buffers the shock of the US trade tariffs and potential further restrictions while continuing deleveraging and derisking without triggering too sharp a slowdown in growth, poses complex trade-offs,” they added.

The U.S. and China on Wednesday concluded a three-day round of trade talks in Beijing, which analysts said revealed signs of modest progress.

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Apple TV channels streaming TV service announced

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Apple TV Channels includes Epix, HBO, Showtime, Starz and others. Users will need to subscribe to each channel, but Apple did not say how much it will cost for each service or if it will offer a package that includes all of them at a discount.

“For some of us, the big bundle is more than we need, so we designed a new TV experience where you can pay for only the channels you want all in one app,” Apple’s Peter Stern said during Apple’s press conference. “Watch everything on-demand and ad-free.”

Some of this isn’t new: Apple TV already lets people connect their cable provider into the Apple TV app and, using single sign-on, automatically login to apps that support streaming if you also pay for cable.

A new home screen inside a new Apple TV app will serve as a launchpad for finding TV shows and movies to watch, and it will make recommendations it thinks you’ll like. The Apple TV app is already available on iPad, iPhone and Apple TV, but the company will also bring it to Macs this spring. It will also launch on Vizio, Sony, LG and Samsung smart TVs, as well as Roku and Amazon Fire TV boxes.

Apple TV Channels and the new Apple TV app will launch through a software update in May. It will be available in more than 100 countries.

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Trump’s victory in the Mueller probe could make him take a tougher stand in China talks

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President Donald Trump’s resounding triumph in the Russia collusion investigation is set to reverberate into policy, with the most likely first impact the looming trade negotiations with China.

With the release of a summary of Robert Mueller’s report on his two-year investigation, a previously reeling Trump no longer looks as desperate for a policy win of any sort.

“It sure looked a month ago like he really badly needed a victory. I thought he would take virtually anything on trade,” said Greg Valliere, chief U.S. policy strategist at AGF and an expert on the political ramifications on financial markets. “Now that he’s got this victory, it makes him less desperate for a deal. Maybe he can get a little tougher on the Chinese.”

The timing couldn’t be better for Trump.

Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer are off to China this week to continue negotiations over multiple trade-related issues. The two sides have been at loggerheads and involved in a tit-for-tat tariff battle that has been suspended while the negotiations continue.

Financial markets have been nervous over the progress of talks, and Wall Street largely has been hoping the issues could be resolved by the end of the month.

However, the potential that Trump could feel emboldened by the apparent conclusion from the Mueller report that the president’s campaign did not collude with Russia might delay progress with China.

“Although it is too early to tell, the developments are likely to increase the stickiness of the administration’s policies for the foreseeable future,” Ed Mills, public policy analyst at Raymond James, said in a note. “This may serve to lengthen the runway for the completion of a deal with greater concessions from China.”

The Mueller report and the China negotiations were thought to represent two of the key unknowns for corporate executives and investors. After 2018 saw the best economic growth of the expansion that began in mid-2009, 2019 started off with a high level of uncertainty, particularly over the effects that slowdowns in Europe and China will have on the U.S.

With an election year right around the corner, Trump also will need to shore up his base, much of which exists in the heartland and among the farmers who have taken a substantial hit from the China tensions. China also has suffered by losing a key market for its exports.

“Both sides have incentives to reach an agreement,” wrote Tom Block, head of research at Fundstrat Global Advisors. “China’s economy has been slipping and an end to mounting US tariffs would be a significant boost. For the US, all roads for a Trump 2020 victory lead through a solid red farm belt.”

Those looking for a resolution, however, may have to be patient.

“For people who were hoping for a quick trade deal, prospects have slipped that we’ll get anything done quickly,” Valliere said. “This could drag on a little bit more than the market had anticipated.”

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Trump moves toward China trade deal and USMCA after Mueller report

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The high-stakes trade decisions in Washington do not end there. Trump has also accused Europe of unfair trade practices, and sees tariffs on European cars as one means to address them.

The move would come with its own political risks. Trump’s tariff policy has sparked more backlash from Republicans on Capitol Hill than just about anything the president has done since he took office.

GOP lawmakers have in particular questioned the national security justification the Trump administration used to put duties on steel and aluminum imports last year. A group of lawmakers from both major parties led by Sen. Pat Toomey, R-Pa., wrote to Commerce Secretary Wilbur Ross last week asking him to publish the auto tariff report and answer questions about how he came to his conclusions.

Some GOP senators have already signaled they will oppose auto tariffs if Trump levies them.

“Section 232 is a vital trade remedy tool for genuine national security threats, but misusing it on autos is harmful for Ohio, its economy & auto manufacturing in our state,” Sen. Rob Portman, R-Ohio, said in a written statement. “I urge the administration to make public its recent report justifying its rationale in this case.”

Last week, Trump told Fox Business Network that he wants European automakers to build their cars in the U.S. Still, he may not exactly agree with the rationale his administration would use to levy the duties on automobiles.

Asked if he thought car imports threatened national security, the president answered, “Well, no.” He said “what poses a national security risk is our balance sheet,” in reference to trade deficits with the European Union.

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